"Chinese airport revenues to rise on fee changes"

Wednesday, October 2, 2002

Airport revenues to rise on fee changes
By  Eric Ng
United Kingdom - The London Financial Times


Mainland airports will see small increases in revenues following last
month's fee structure change by the Civil Aviation Administration of
China (CAAC), say analysts. 

The industry watchdog cut airport passenger charges by 26.9 per cent,
but raised the aircraft movement charge by about 290 per cent, the
analysts said. 

The passenger charge airlines pay was reduced from 50 yuan to 45 yuan
per seat, but the assumed occupancy on which the fee is calculated was
lowered from 80 to 65 per cent. The combined effect is a 26.9 per cent
fall. 

"The net result will be a low single-digit percentage rise in revenues
for the airports," an analyst said, citing an unnamed CAAC source. 

The infocastfn.com financial Web site quoted sources as saying that
Beijing Capital International Airport's (BCIA) management had told them
the H-share and its parent expected 30 million yuan (about HK$28.26
million) to 40 million yuan in additional revenues annually from the
changes. 

That was about 1.5 to 2 per cent of BCIA's 2.01 billion yuan total
revenues last year. 

Deutsche Bank analyst Kevin O'Connor estimated the revenues, if in the
range reported, would translate into a 4 per cent rise in next year's
net profit. 

Mainland media earlier quoted BCIA company secretary Wang Jianzhuang as
saying take-off and landing fees for domestic airlines would rise to
meet those of foreign carriers now China was a World Trade Organisation
member. CAAC and airport officials were unavailable for comment
yesterday. The fee change is expected to have a minimal impact on
Chinese carriers' bottom-lines. 

Analysts said the new fee schedule would slightly favour carriers
running the largest and smallest aircraft, as the fee increases for
aircraft less than 25 tonnes and above 200 tonnes were 284 per cent,
compared with 286 to 300 per cent for those between 25 and 200 tonnes.


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